TaxTMI 
TaxTMI 
Revised and updated FTP, 2015-2020
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....ENT OF INDIA MINISTRY OF COMMERCE AND INDUSTRY DEPARTMENT OF COMMERCE सà¥à¤°à¥‡à¤¶ पà¥à¤°à¤à¥ SURESH PRABHU सतà¥à¤¯à¤®à¥‡à¤µ जयते वाणिजà¥à¤¯ à¤à¤µà¤‚ उदà¥à¤¯à¥‹à¤— मंतà¥à¤°à¥€ à¤à¤¾à¤°à¤¤ सरकार, नई दिलà¥à¤²à¥€ MINISTER OF COMMERCE & INDUSTRY GOVERNMENT OF INDIA, NEW DELHI सà¥à¤µà¤šà¥à¤› à¤à¤¾à¤°à¤¤ à¤à¤• कदम सà¥à¤µà¤šà¥à¤›à¤¤à¤¾ की ओर FOREWORD The mid-term review of the Foreign Trade Policy, 2015-20 provides an opportunity to make corrective changes as per the evolving global trade scenario and to align with the changes in the indirect taxes regime with the introduction of GST from 1st July 2017. The FTP-2015-20 launched on April 1, 2015 introduced a slew of measures by providing a framework for increasing exports of goods and services, generation of employmen....
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....ली- 110011 / दूरà¤à¤¾à¤· 91-11-23062223, 23061492 23061008 फैकà¥à¤¸: 23062947 Udyog Bhavan, Rafi Marg, New Delhi-110011/ Tel. No. 91-11-23062223, 23061492, 23061008 Fax: 23062947 E-mail: [email protected] The MEIS Schedule has been constantly expanded and covers around 70% of tariff lines under ITS (HS) 2017. The MEIS rates have been further enhanced for Ready-made Garments, Agriculture products and select labour intensive and MSME products to provide a boost to exports and employment generation. To provide an impetus to the export of services, the SEIS rates have also been increased. The validity period of the Duty Credit Scrips has been changed from 18 months to 24 months to enhance their utility and attractiveness in the GST regime. To enable Ease of Trading across Border, support and hand-holding of exporters and review and simplification of procedures will be undertaken. A new duty exemption scheme with Self Declaration and Self Ratification has been introduced to allow duty free inputs for export production. India has also signed "Trade Facilitation Agreement' under Worl....
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....s the revised Foreign Trade Policy, 2015-2020. This Foreign Trade Policy shall come into force w.e.f. 05.12.2017. Effect of this Notification: The revised and updated Foreign Trade Policy, 2015-2020, is hereby notified. Ста [Alok Vardhan Chaturvedi] Director General of Foreign Trade Email: [email protected] [Issued from File No. 01/94/180/332/AM15/PC4/Vol. II] Table of Contents CHAPTER 1 LEGAL FRAMEWORK AND TRADE FACILITATION 9 9 A. LEGAL FRAMEWORK 1.00 LEGAL BASIS OF FOREIGN TRADE POLICY (FTP) 9 1.01 DURATION OF FTP 9 1.02 AMENDMENT TO FTP 1.03 1.04 HAND BOOK OF PROCEDURES (HBP) AND APPENDICES & AAYAT NIRYAT FORMS (AANF) SPECIFIC PROVISION TO PREVAIL OVER THE GENERAL 9 1.05 TRANSITIONAL ARRANGEMENTS 10 B. TRADE FACILITATION&EASE OF DOING BUSINESS .10 1.06 OBJECTIVE 10 1.07 DGFT AS A FACILITATOR OF EXPORTS/IMPORTS 1.08 NIRYAT BANDHU - HAND HOLDING SCHEME FOR NEW EXPORT / IMPORT ENTREPRENEURS 1.09 CITIZEN'S CHARTER 1.10 ONLINE COMPLAINT REGISTRATION AND MONITORING SYSTEM 10 11 11 11 1.11 ISSUE OF E-IEC (ELECTRONIC-IMPORTER EXPORTER CODE)....
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....GHT 2.06 MANDATORY DOCUMENTS FOR EXPORT/IMPORT OF GOODS FROM/INTO INDIA: 2.07 PRINCIPLES OF RESTRICTIONS 2.09 EXPORT OF SCOMET ITEMS 26 27 27 27 28 28 28 29 29 29 2.15 PENAL ACTION AND PLACING OF AN ENTITY in Denied EntITY LIST (DEL) PROHIBITIONS (COUNTRY, ORGANISATIONS, GROUPS, INDIVIDUALS ETC. AND PRODUCT SPECIFIC): ......30 2.16 PROHIBITION ON IMPORT AND EXPORT OF ‘ARMS AND RELATED MATERIAL' FROM / TO IRAQ 30 2.16 A PROHIBITION ON TRADE WITH THE ISLAMIC STATE IN IRAQ AND THE LEVANT [ISIL, ALSO KNOWN AS DAESH], AL NUSRAH FRONT [ANF] AND OTHER INDIVIDUALS, GROUPS, UNDERTAKINGS AND ENTITIES ASSOCIATED WITH AL QAIDA 30 2.17 PROHIBITION ON DIRECT OR INDIRECT IMPORT AND EXPORT FROM/TO DPRK 2.18 DIRECT OR INDIRECT EXPORT/IMPORT TO/FROM IRAN 2.19 PROHIBITION ON IMPORT OF CHARCOAL FROM SOMALIA 2.20 STATE TRADING ENTERPRISES (STES) 31 31 32 32 2.21 TRADE WITH NEIGHBOURING COUNTRIES 2.22 TRANSIT FACILITY 2.23 TRADE WITH RUSSIA UNDER DEBT-REPAYMENT AGREEMENT 33 33 33 PASSENGER BAGGAGE - 2.24 IMPORT OF SAMPLES 2.25 IMPORT OF GIFTS 2.26 2.27 RE IMPORT....
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....3 OBJECTIVE 51 3.04 ENTITLEMENT UNDER MEIS 52 3.05 3.06 EXPORT OF GOODS THROUGH COURIER OR FOREIGN POST OFFICES USING E-COMMERCE INELIGIBLE CATEGORIES UNDER MEIS 52 52 SERVICE EXPORTS FROM INDIA SCHEME (SEIS) ..... .53 3.07 OBJECTIVE 53 3.08 ELIGIBILITY 53 3.09 INELIGIBLE CATEGORIES UNDER SEIS 54 3.10 ENTITLEMENT UNDER SEIS 54 3.11 3.12 REMITTANCES THROUGH CREDIT CARD AND OTHER INSTRUMENTS FOR MEIS AND SEIS EFFECTIVE DATE OF SCHEMES (MEIS AND SEIS) 54 54 3.13 SPECIAL PROVISIONS 54 COMMON PROVISIONS FOR EXPORTS FROM INDIA SCHEMES (MEIS AND SEIS) ... 3.14 TRANSITIONAL ARRANGEMENT .55 55 3 3.15 CENVAT/DRAWBACK 55 3.16 IMPORT UNDER LEASE FINANCING 55 3.17 TRANSFER OF EXPORT PERFORMANCE 55 3.18 FACILITY OF PAYMENT OF CUSTOM DUTIES AND FEE THROUGH DUTY CREDIT SCRIPS 56 3.19 RISK MANAGEMENT SYSTEM 56 3.20 STATUS Holder 57 3.24 3.21 STATUS CATEGORY 3.22 GRANT OF DOUBLE WEIGHTAGE 3.23 OTHER CONDITIONS FOR GRANT OF STATUS PRIVILEGES OF STATUS HOLDERS CHAPTER 4 DUTY EXEMPTION/REMISSION SCHEMES. 4.00 O....
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....ONDS WITH RE-IMPORT FACILITY at Zero DUTY 4.45 EXPORT AGAINST SUPPLY BY FOREIGN BUYER 81 81 82 4.46 EXPORT PROMOTION TOURS/EXPORT OF BRANDED JEWELLERY 4.47 PERSONAL CARRIAGE OF EXPORT /IMPORT PARCELS 82 82 4.48 EXPORT BY POST 82 4.49 PRIVATE / PUBLIC BONDED WAREHOUSE 83 4.50 DIAMOND & JEWELLERY DOLLAR ACCOUNTS 83 4.51 EXPORT OF CUT & POLISHED PRECIOUS AND SEMI-PRECIOUS STONES FOR TREATMENT AND RE-IMPORT 84 4.52 RE-IMPORT OF REJECTED JEWELLERY 84 84 $ཚ 4.53 EXPORT AND IMPORT ON CONSIGNMENT BASIS CHAPTER 5 ------------ .85 -------------- EXPORT PROMOTION CAPITAL GOODS (EPCG) SCHEME. 5.00 OBJECTIVE 5.01 EPCG SCHEME 5.02 COVERAGE ..85 85 85 86 5.03 ACTUAL USER CONDITION 5.04 EXPORT OBLIGATION (EO) 5.05 DELETED 87 87 88 5.06 LUT/BOND/BG IN CASE OF AGRO UNITS 88 5.07 INDIGENOUS SOURCING OF CAPITAL GOODS AND BENEFITS TO DOMESTIC SUPPLIER 88 5.08 CALCULATION OF EXPORT OBLIGATION 88 5.09 INCENTIVE FOR EARLY EO FULFILMENT 89 5.10 REDUCED EO FOR Green TechnoLOGY PRODUCTS 89 5.11 REDUCED EO FOR NORTH EAST REG....
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....9 7.12 TRANSITIONAL PARA 119 CHAPTER 8 121 QUALITY COMPLAINTS AND TRADE DISPUTES. .............. 121 ------------ 8.00 OBJECTIVE 121 8.02 OBLIGATION ON THE PART OF IMPORTER/EXPORTER 8.01 QUALITY COMPLAINTS/TRADE DISPUTES 8.03 PROVISIONS IN FT (D&R) ACT & FT (REGULATION) RULES FOR NECESSARY ACTION AGAINST ERRING EXPORTERS/IMPORTERS 121 121 8.04 MECHANISM FOR HANDLING OF COMPLAINTS/ DISPUTES 8.05 PROCEEDINGS UNDER CQCTD 8.06 PROCEDURES TO DEAL WITH COMPLAINTS AND TRADE DISPUTES 122 123 123 123 8.07 CORRECTIVE MEASURES 8.08 NODAL OFFICER CHAPTER 9........... DEFINITIONS. APPENDIX I (PARA 2.17). GLOSSARY (ACRONYMS)......... 7 124 124 .125 125 136 140 8 CHAPTER 1 LEGAL FRAMEWORK AND TRADE FACILITATION A. LEGAL FRAMEWORK 1.00 Legal Basis of Foreign Trade Policy (FTP) The Foreign Trade Policy, 2015-20, (as updated) w.e.f. 05.12.2017is notified by Central Government, in exercise of powers conferred under Section 5 of the Foreign Trade (Development & Regulation) Act, 1992 (No. 22 of 1992) [FT (D&R) Act], as amended. 1.01 Duration of FTP ....
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....striction and it shall be restricted to the balance value and quantity available and time period of such irrevocable letter of credit. For operationalising such irrevocable letter of credit, the applicant shall have to register the Letter of Credit with jurisdictional Regional Authority (RA) against computerized receipt, within 15 days of the imposition of any such restriction or regulation. B. TRADE FACILITATION& EASE OF DOING BUSINESS 1.06 Objective Trade facilitation is a priority of the Government for cutting down the transaction cost and time, thereby rendering Indian exports more competitive. The various provisions of FTP and measures taken by the Government in the direction of trade facilitation are consolidated under this chapter for the benefit of stakeholders of import and export trade. 1.07 DGFT as a facilitator of exports/imports DGFT has a commitment to function as a facilitator of exports and imports. Focus is on good governance, which depends on efficient, transparent and accountable delivery systems. In order to facilitate international trade, DGFT consults various Export Promotion Councils as well as Trade an....
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....tally. (b) Processing of such applications by Regional Authority (RAS) of DGFT would be done online and a digitally signed e-IEC would normally be issued/ e-mailed to the applicant within 2 working days. (c) In case the application is incomplete or otherwise ineligible, the same shall be rejected and a Rejection letter/email (with reasons for rejection) would be sent to the applicant. (d) Application for issue of e-IEC can also be made from eBiz platform (https://www.ebiz.gov.in). 1.12 e-BRC (a) One prominent initiative in recent times has been the e-BRC (Electronic Bank Realisation Certificate) project and its successful implementation by DGFT. It has enabled DGFT to capture details of realisation of export proceeds directly from the Banks through secured electronic mode. This has facilitated the implementation of various export promotion schemes without any physical interface with the stake holders. (b) RBI has also developed a comprehensive IT-based system called Export Data Processing and Monitoring System (EDPMS) for monitoring of export of goods and software and facilitating AD banks to report various returns t....
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....quired to file applications online on the website of DGFT under the Icon E-COM and are required to submit the duly signed and stamped printout of the online application along with all the necessary documents viz. technical specifications, literature etc. Now, a facility is being provided to upload copies of all the required documents including technical specifications, literature etc in PDF/JPG/JPEG/GIF format in the online filing system in respect of (a) Fixation of norms under Advance Authorisation by Norms Committees (b) Export of Restricted Items (c) Import of Restricted Items (d) SCOMET Items. The exporters 13 would not be required to submit the hard copy of application except architectural drawings, machine drawings etc which may be difficult to scan and upload. The processing of the applications will also be done online. 1.18 Facility to upload documents by CA/ CS / Cost Accountant In order to move towards paperless processing, an electronic procedure is being developed to upload digitally signed documents by Chartered. Accountant / Company Secretary / Cost Accountant. To start with, this facility would be created for Exp....
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....essage exchange for transmission of Bills of Entry (import details) from Customs to DGFT. (ii) Online issuance of Export Obligation Discharge Certificate (EODC). (iii) Message exchange with Ministry of Corporate Affairs for CIN & DIN Information. (iv) Message exchange with CBDT for PAN. (V) Open API for submission of e-IEC Application. (vi) Mobile Applications for FTP. 1.23 Free passage of Export consignment Consignments of items meant for exports shall not be withheld/ delayed for any reason by any agency of Central/State Government. In case of any doubt, authorities concerned may ask for an undertaking from exporter and release such consignment. 15 1.24 No seizure of export related Stock No seizure shall be made by any agency so as to disrupt manufacturing activity and delivery schedule of exports. In exceptional cases, concerned agency may seize the stock on the basis of prima facie evidence of serious irregularity. However, such seizure should be lifted within 7 days unless the irregularities are substantiated. 1.25 24 X 7 Customs clearance CBEC introduced the facility of 24 X 7 customs clearance in the year 2....
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....vi) Minimal disruption to flow of cargo after a security related disruption; Reduction in dwell time and related costs; and Customs advice / assistance if trade faces unexpected issues with Customs of countries with which India have MRA. The AEO programmes have been implemented by other Customs administrations that give AEO status holders preferential Customs treatment in terms of reduced examination, faster clearances and other benefits. Thus, the AEO programme is expected to result in Mutual Recognition Agreements (MRA) with these Customs administrations. MRAs would ensure export goods get due Customs facilitation at the point of entry in the foreign country. Apart from securing supply chain, the benefits include reduction in dwell time and consequent cost of doing business. Indian Customs has signed MRA with Hong Kong Customs to recognise respective AEO Programmes to enable trade to get benefits on reciprocal basis. 17 Indian Customs is also engaged in finalising MRA with other counties such as South Korea, Taiwan, USA etc. (c) As a step further towards trust based compliance, Indian Customs has introduced the new/re....
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....e (TEE) (a) (b) (c) Objective: Development and growth of export production centres. A number of towns have emerged as dynamic industrial clusters contributing handsomely to India's exports. It is necessary to grant recognition to these industrial clusters with a view to maximize their potential and enable them to move up the value chain and also to tap new markets. Selected towns producing goods of Rs. 750 Crore or more may be notified as TEE based on potential for growth in exports. However, for TEE in Handloom, Handicraft, Agriculture and Fisheries sector, threshold limit would be Rs.150 Crore. The following facilities will be provided to such TEE's: (i) Recognized associations of units will be provided financial assistance under MAI scheme, on priority basis, for export promotion projects for marketing, capacity building and technological services. (ii) Common Service Providers in these areas shall be entitled for Authorisation under EPCG scheme. Notified Towns (TEEs) are listed in Appendix 1 B of Appendices & ANFS. 19 1.36 DGCI&S, Kolkata as the provider of trade data Director General of Commercial Intel....
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....l in synergizing the various 20 20 trade facilitation perspectives across the country and will also focus on an outreach programmes for sensitization of all stakeholders about TFA. 1.39 e-mail initiatives CBEC has initiated e-mail notification service to importers for information related to all important stages of import clearances. 1.40 Facility of deferred payment As a trade facilitation measure, CBEC has introduced facility of deferred payment of customs duty. Further, Deferred Payment of Import Duty Rules, 2016 have been notified and the same have come into effect from 16.11.2016. The importers certified under AEO Programme (Tier-two) and (Tier-Three) have been notified for availing the benefit of these Rules. 21 224 22 22 CHAPTER 2 GENERAL PROVISIONS REGARDING IMPORTS AND EXPORTS 2.00 Objective The general provisions governing import and export of goods and services are dealt with in this chapter. 2.01 Exports and Imports - 'Free', unless regulated (a) Exports and Imports shall be 'Free' except when regulated by way of 'prohibition', 'restriction' or 'exclusive trading through State Trading Enterpris....
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.... 24 (I) An IEC is a 10-character alpha-numeric number allotted to a person that is mandatory for undertaking any export/import activities. With a view to maintain the unique identity of an entity (firm/company/LLP etc.), consequent upon introduction / implementation of GST, IEC will be equal to PAN and will be separately issued by DGFT based on an application. (a) Application for obtaining IEC may be filed online in ANF 2A with applicable fees and submitted with digital signature. (b) When an e-IEC is approved by the competent authority, applicant is informed through e-mail that a computer generated e-IEC is available on the DGFT website. By clicking on “Application Status†after having filled and submitted the requisite details in "Online IEC Application" webpage, applicant can view and print his e-IEC. (c) The applicant may submit online application with the following details /documents (scanned copies to be submitted/ uploaded) along with the IEC application: (i) Digital photograph of the signatory applicant; (ii) (iii) Copy of the PAN card of the business entity in whose name Import/Export would be done ....
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....ents, trademarks and copyrights, and the (d) prevention of deceptive practices; Prevention of use of prison labour; (e) Protection of national treasures of artistic, historic or (f) (g) (h) (i) archaeological value; Conservation of exhaustible natural resources; Protection of trade of fissionable material or material from which they are derived; Prevention of traffic in arms, ammunition and implements of war Relating to the importation or exportation of gold or silver. 2.08 Export/Import of Restricted Goods/Services Any goods/service, the export or import of which is 'Restricted' may be exported or imported only in accordance with an Authorisation / Permission or in accordance with the Procedures prescribed in a Notification / Public Notice issued in this regard. 2.09 Export of SCOMET Items Export of Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET), as indicated in Appendix-3 of Schedule 2 of ITC(HS) Classification of Export & Import Items, shall be governed by the specific provisions of (i) Chapter IV A of the FT(D&R) Act, 1992 as amended from 27 time to time (ii) Sl. No. 4 & ....
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.... of FT (D&R) Act, Rules made there under and FTP. 2.15 Penal action and placing of an entity in Denied Entity List (DEL) a) If an Authorisation holder violates any condition of such Authorisation or fails to fulfill export obligation, or fails to deposit the requisite amount within the period specified in demand notice issued by Department of Revenue and /or DGFT, he shall be liable for action in accordance with FT (D&R) Act, the Rules and Orders made there under, FTP and any other law for time being in force. b) With a view to raising ethical standards and for ease of doing business, DGFT has provided for self certification system under various schemes. In such cases, applicants shall undertake self certification with sufficient care and caution in filling up information/particulars. Any information/particulars subsequently found untrue/incorrect will be 29 liable for action under FTDR Act, 1992 and Rules therein in addition to penal action under any other Act/Order. c) A firm may be placed under Denied Entity List (DEL), by the concerned RA, under the provision of Rule 7 of Foreign Trade (Regulation) Rules, 1993. On issu....
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....port/Import to/from Iran (a) Direct or indirect export to Iran or import from Iran of any item, material, equipment, goods and technology mentioned in the following documents would be permitted subject to the provisions contained in Annex-B to the United Nations Security Council Resolution 2231 (2015): (i) Items listed in INFCIRC/254/Rev.9/Part 1 and INFCIRC/254/Rev.7 /Part 2 (IAEA Documents) as updated by the IAEA from time to time. (ii) Items listed in S/2006/263 (UN Security Council document) as updated by the Security Council from time to time. (b) All the UN Security Council Resolutions/Documents and IAEA Documents referred to above are available on the UN Security Council website (www.un.org/Docs/sc) and IAEA website (www.iaea.org). 31 2.19 Prohibition on Import of Charcoal from Somalia Direct or indirect import of charcoal is prohibited from Somalia, irrespective of whether or not such charcoal has originated in Somalia [United Nations Security Council Resolution 2036 (2012)]. Importers of Charcoal shall submit a declaration to Customs that the consignment has not originated in Somalia. Import / Export through State....
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....r Baggage 33 (a) (b) Bona-fide household goods and personal effects may be imported as part of passenger baggage as per limits, terms and conditions thereof in Baggage Rules notified by Ministry of Finance. Samples of such items that are otherwise freely importable under FTP may also be imported as part of passenger baggage without an Authorisation. (c) Exporters coming from abroad are also allowed to import drawings, patterns, labels, price tags, buttons, belts, trimming and embellishments required for export, as part of their passenger baggage without an Authorisation. 2.27 Re-import of goods repaired abroad Capital goods, equipments, components, parts and accessories, whether imported or indigenous, except those restricted under ITC (HS) may be sent abroad for repairs, testing, quality improvement or upgradation or standardization of technology and re-imported without an Authorisation. 2.28 Import of goods used in projects abroad Project contractors after completion of projects abroad, may import without an Authorisation, goods including capital goods used in the project, provided they have been used for at least ....
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....waste from SEZ A SEZ unit/Developer/ Co-developer may be allowed to dispose of in DTA any waste or scrap, including any form of metallic waste and scrap, generated during manufacturing or processing activity, without an Authorisation, on payment of applicable Customs Duty. Other Provisions Related to Imports: 2.34 Import under Lease Financing No specific permission of RA is required for lease financed capital goods. 36 2.35 Execution of Legal Undertaking (LUT) / Bank Guarantee (BG) (a) Wherever any duty free import is allowed or where otherwise specifically stated, importer shall execute, Legal Undertaking (LUT) / Bank Guarantee (BG) / Bond with the Customs Authority, as prescribed, before clearance of goods. (b) In case of indigenous sourcing, Authorisation holder shall furnish LUT/BG/Bond to RA concerned before sourcing material from indigenous supplier/nominated agency as prescribed in Chapter 2 of Handbook of Procedures. 2.36 Private/Public Bonded Warehouses for Imports (a) Private/ Public bonded warehouses may be set up in DTA as per rules, regulations and notifications issued under the Customs Act, 1962. Any perso....
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....00/- in a licensing year, may be exported as a gift. However, items mentioned as restricted for exports in ITC (HS) shall not be exported as a gift, without an Authorisation. 2.45 Export of Passenger Baggage (a) Bona-fide personal baggage may be exported either along with passenger or, if unaccompanied, within one year before or after passenger's departure from India. However, items mentioned as restricted in ITC (HS) shall require an Authorisation. Government of India officials proceeding abroad on official postings shall, however, be permitted to carry along with their personal baggage, food items (free, restricted or prohibited) strictly for their personal consumption. The Provisions of the Para shall be subject to Baggage Rules issued under Customs Act, 1962. (b) Samples of such items that are otherwise freely exportable under FTP may also be exported as part of passenger baggage without an Authorisation. 2.46 Import for export I. (a) Goods imported, in accordance with FTP, may be exported in same or substantially the same form without an Authorisation provided that item to be imported or exported is not in the restricted....
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....t I (e) and II (a), (b) and (c) above shall not be eligible for any export incentives. 2.47 Export through Courier Service/Post Exports through a registered courier service is permitted as per Notification issued by DoR. However, exportability of such items shall be regulated in accordance with FTP/ ITC (HS), 2017. 2.48 Export of Replacement Goods Goods or parts thereof on being exported and found defective/damaged or otherwise unfit for use may be replaced free of charge by the exporter and such goods shall be allowed for export by Customs authorities, provided that replacement goods are not mentioned as restricted/SCOMET items for exports in ITC (HS). If the export item is ‘restricted'/ under SCOMET, the exporter shall require a export license for replacement. 41 2.49 Export of Repaired Goods Goods or parts thereof, except restricted under ITC (HS), on being exported and found defective, damaged or otherwise unfit for use may be imported for repair and subsequent re-export. Such goods shall be allowed clearance without an Authorisation and in accordance with customs notification. To that extent the exporter shall retu....
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.... (for which payments are received through Asian Clearing Union (ACU) shall be denominated in ACU Dollar. However, participants in the ACU may settle their transactions in ACU Dollar or in ACU Euro as per RBI Notifications. Central Government may relax provisions of this paragraph in appropriate cases. Export contracts and invoices can be denominated in Indian rupees against EXIM Bank/Government of India line of credit. 2.53 Export to Iran -Realisations in Indian Rupees to be eligible for FTP benefits/ incentives Notwithstanding the provisions contained in para 2.52 (a) above, export proceeds realized in Indian Rupees against exports to Iran are permitted to 43 avail exports benefits / incentives under the Foreign Trade Policy (2015- 20), at par with export proceeds realized in freely convertible currency. 2.54 Non-Realisation of Export Proceeds (a) If an exporter fails to realize export proceeds within time specified by RBI, he shall, without prejudice to any liability or penalty under any law in force, be liable to return all benefits / incentives availed against such exports and action in accordance with provisions of FT (D&R)....
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.... Registering Authorities for issue of RCMC to its members are detailed in Para 2.92 of the Handbook of Procedures. 2.56 Registration-cum-Membership Certificate (RCMC) Any person, applying for: (a) An Authorisation to import/export (except items) listed as 'Restricted' items in ITC (HS) Or (b) Any other benefit or concession under FTP shall be required to furnish or upload on DGFT's website in the Importer Exporter Profile, the RCMC granted by competent authority in accordance with Procedures specified in Handbook of Procedures unless specifically exempted under FTP. Certificate of Registration as Exporter of Spices (CRES) issued by Spices Board and Certificate of Registration as 45 Exporter of coir & coir products issued by the Coir Board shall be treated as Registration-Cum-Membership Certificate (RCMC) for the purposes under this Policy. Policy Interpretation and Relaxations: 2.57 Interpretation of Policy (a) The decision of DGFT shall be final and binding on all matters relating to interpretation of Policy, or provision in Handbook of Procedures, Appendices and Aayat Niryat Forms or classification of any item f....
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....me to time. 2.60 Regularization of EO default and settlement of Customs duty and interest through Settlement Commission With a view to providing assistance to firms who have defaulted under FTP for reasons beyond their control as also facilitating merger, acquisition and rehabilitation of sick units, it has been decided to empower Settlement Commission in Department of Revenue to decide such cases also with effect from 01.04.2005. 47 Self Certification of Originating Goods: 2.61 Approved Exporter Scheme for Self Certification of Certificate of Origin. (i) Currently, Certificates of Origin under various Preferential Trade Agreements [PTA], Free Trade Agreements [FTAs], Comprehensive Economic Cooperation Agreements [CECA] and Comprehensive Economic Partnerships Agreements [CEPA] are issued by designated agencies as per Appendix 2B of Appendices and Aayat and Niryat Forms. A new optional system of self certification is being introduced with a view to reducing transaction cost. (ii) The Manufacturers who are also Status Holders shall be eligible for Approved Exporter Scheme. Approved Exporters will be entitled to self- cert....
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....ii) Payment of Central excise duties on domestic procurement of inputs or goods, (iii) Deleted (iv) Payment of Basic Customs Duty and Additional Customs Duty specified under Sections 3 (1), 3 (3) and 3 (5) of the Customs Tariff Act, 1975 and fee as per paragraph 3.18 of this Policy. Merchandise Exports from India Scheme (MEIS) 3.03 Objective Objective of the Merchandise Exports from India Scheme (MEIS) is to promote the manufacture and export of notified goods/ products. 51 3.04 Entitlement under MEIS Exports of notified goods/products with ITC[HS] code, to notified markets as listed in Appendix 3B, shall be rewarded under MEIS. Appendix 3B also lists the rate(s) of rewards on various notified products [ITC (HS) code wise]. The basis of calculation of reward would be on realised FOB value of exports in free foreign exchange, or on FOB value of exports as given in the Shipping Bills in freely convertible foreign currencies, whichever is less, unless otherwise specified. 3.05 Export of goods through courier or foreign post offices using e- Commerce (i) Exports of goods through courier or foreign post office using e- ....
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....es of Reserve Bank of India. The list of such services is indicated in Appendix 3E. Net Foreign exchange earnings for the scheme are defined as under: = Net Foreign Exchange Gross Earnings of Foreign Exchange minus Total expenses / payment / remittances of Foreign Exchange by the IEC holder, relating to service sector in the Financial year. If the IEC holder is a manufacturer of goods as well as service provider, then the foreign exchange earnings and Total expenses / payment / remittances shall be taken into account for service sector only. In order to claim reward under the scheme, Service provider shall have to have an active IEC at the time of rendering such services for which rewards are claimed. 53 3.09 Ineligible categories under SEIS Foreign exchange remittances other than those earned for rendering of notified services would not be counted for entitlement. Thus, other sources of foreign exchange earnings such as equity or debt participation, donations, receipts of repayment of loans etc. and any other inflow of foreign exchange, unrelated to rendering of service, would be ineligible. 3.10 Entitlement under SEIS....
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.... cash or through debit under Duty Credit scrip shall be adjusted for Duty Drawback as per DoR rules or notifications. 3.16 Import under lease financing Utilization of Duty Credit Scrip shall be permitted for payment of duty in case of import of capital goods under lease financing in terms of provision in paragraph 2.34 of FTP. 3.17 Transfer of export performance (a) (b) Transfer of export performance from one IEC holder to another IEC holder shall not be permitted. Thus, a shipping bill containing name of applicant shall be counted in export performance / turnover of applicant only if export proceeds from overseas are realized in applicant's bank account and this shall be evidenced from e- BRC / FIRC. However, MEIS, rewards can be claimed either by the supporting manufacturer (along with disclaimer from the company / firm who has realized the foreign exchange directly from overseas) or by the company/ firm who has realized the foreign exchange directly from overseas. 55 55 3.18 Facility of payment of custom duties and fee through duty credit scrips (a) Duty Credit Scrip can be utilized / debited for payment ....
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....certificate etc. for a period of at least three years from the date of issuance of scrips or the completion of scrutiny under RMS initiated by the RA whichever is later. 3.20 Status Holder (a) Status Holders are business leaders who have excelled in international trade and have successfully contributed to country's foreign trade. Status Holders are expected to not only contribute towards India's exports but also provide guidance and handholding to new entrepreneurs. (b) (c) (d) All exporters of goods, services and technology having an import- export code (IEC) number shall be eligible for recognition as a status holder. Status recognition will depend on export performance. An applicant shall be categorized as status holder on achieving export performance during the current and previous three financial years (for Gems & Jewellery Sector the performance during the current and previous two financial years shall be considered for recognition as status holder) as indicated in paragraph 3.21 of Foreign Trade Policy. The export performance will be counted on the basis of FOB of export earning in freely convertible foreign c....
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....FT from time to time, for specified status holder Exemption from furnishing of Bank Guarantee for Schemes under FTP, unless specified otherwise anywhere in FTP or HBP; Exemption from compulsory negotiation of documents through banks. Remittance / receipts, however, would be received through banking channels; Two star and above Export houses shall be permitted to establish Export Warehouses as per Department of Revenue guidelines. Three Star and above Export House shall be entitled to get benefit of Accredited Clients Programme (ACP) as per the guidelines of CBEC (website: http://cbec.gov.in). The status holders would be entitled to preferential treatment and priority in handling of their consignments by the concerned agencies. Manufacturers who are also status holders (Three Star/Four Star/Five Star) will be enabled to self-certify their manufactured 59 (i) (j) goods (as per their IEM/IL/LOI) as originating from India with a view to qualify for preferential treatment under different preferential trading agreements (PTA), Free Trade Agreements (FTAs), Comprehensive Economic Cooperation Agreements (CECA) and Comprehens....
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....horisation is issued for inputs in relation to resultant product, on the following basis: 61 (i) (ii) As per Standard Input Output Norms (SION) notified (available in Hand Book of Procedures); OR On the basis of self declaration as per paragraph 4.07 of Handbook of Procedures. OR (iii) Applicant specific prior fixation of norm by the Norms Committee. OR (iv) On the basis of Self Ratification Scheme in terms of Para 4.07A of Foreign Trade Policy. 4.04 Advance Authorisation for Spices Duty free import of spices covered under Chapter-9 of ITC (HS) shall be permitted only for activities like crushing/grinding / sterilization/ manufacture of oils or oleoresins. Authorisation shall not be available for simply cleaning, grading, re-packing etc. 4.04 A Special Advance Authorisation Scheme for export of Articles of Apparel and Clothing accessories. Duty free import of fabric under 'Special Advance Authorisation Scheme for export of Articles of Apparel and Clothing Accessories' shall be allowed, as per Customs Notification issued for this scheme, for export of items covered under Chapter 61 and 62 of ITC(HS) Classific....
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....ation can be issued either to a manufacturer exporter or merchant exporter tied to supporting manufacturer. (b) Advance Authorisation for pharmaceutical products manufactured through Non-Infringing (NI) process (as indicated in paragraph 4.18 63 of Handbook of Procedures) shall be issued to manufacturer exporter only. (c) Advance Authorisation shall be issued for: (i) Physical export (including export to SEZ); (ii) Intermediate supply; and/or (iii) Supply of goods to the categories mentioned in paragraph 7.02 (b), (c), (e), (f), (g) and (h) of this FTP. (iv) Supply of 'stores' on board of foreign going vessel / aircraft, subject to condition that there is specific Standard Input Output Norms in respect of item supplied. 4.06 Advance Authorisation for Annual Requirement (i) Advance Authorisation for Annual Requirement shall only be issued for items notified in Standard Input Output Norms (SION), and it shall not be available in case of adhoc norms under paragraph 4.03 (b)(ii) of FTP. (ii) Advance Authorisation for Annual Requirement shall also not be available in respect of SION where any item of input appears in ....
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..../ nuts/ vegetables classified under Chapter-7 and Chapter-8 of ITC (HS) book; h) Items covered under heading 2515, 2516, 3301, 3302, 3303 6801 and 6802 of ITC(HS) Classification; i) Items covered under Chapter 50 to 63 of ITC(HS) classification. j) Acetic Anhydride, Ephedrine and Pseudoephedrine; k) Vitamins; 65 vii. ix. 1) Biotechnology items and related products; m) Insecticides, Rodenticides, Fungicides, herbicides, Anti sprouting products, and plant growth regulators, disinfectants and similar products of all forms, types and grades; n) Waste/Scrap of all types; and o) Second hand goods. Inputs imported shall be subject to pre import condition and they shall be physically incorporated in the export product (making normal allowance for wastage). In case of local procurement under invalidation/ARO, the inputs shall be procured prior to manufacture of export item and shall be physically incorporated in the export product. viii. Wherever value of by-products and recoverable wastage generated during manufacturing process is more than 5% of CIF value, corresponding quantity of main input shall be reduced....
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....which value addition is prescribed in paragraph 4.38 of FTP) shall be:- VA = A-B B x100, where A =FOB value of export realized/FOR value of supply received. B =CIF value of inputs covered by Authorisation, plus value of any other input used on which benefit of DBK is claimed or intended to be claimed. 4.09 Minimum Value Addition (i) Minimum value addition required to be achieved under Advance Authorisation is 15%. 67 (ii) Export Products where value addition could be less than 15% are given in Appendix 4D. (iii) Deleted (iv) Minimum value addition for Gems & Jewellery Sector is given in paragraph 4.61 of Handbook of Procedures. (v) In case of Tea, minimum value addition shall be 50%. 4.10 Import of Mandatory Spares Import of mandatory spares which are required to be exported / supplied with the resultant product shall be permitted duty free to the extent of 10% of CIF value of Authorisation. 4.11 Ineligible categories of import on Self Declaration basis (a) (b) (c) Import of following products shall not be permissible on self- declaration basis: (i) (ii) All vegetable edible oils clas....
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.... be clearly indicated in shipping bills. (iii) At the time of discharge of export obligation (issue of EODC) or at the time of redemption, Regional Authority shall allow only those inputs which have been specifically indicated in the shipping bill together with quantity. (iv) The above provisions will also be applicable for supplies to SEZs and supplies made under Deemed exports. Details as given above will have to be indicated in the relevant Bill of Export, ARE-3, Central Excise certified Invoice / import document / Tax Invoice for export prescribed under the GST rules 4.13 Pre-import condition in certain cases (i) DGFT may, by Notification, impose pre-import condition for inputs under this Chapter. (ii) Import items subject to pre-import condition are listed in Appendix 4-J or will be as indicated in Standard Input Output Norms (SION). 69 (iii) Import of drugs from unregistered sources shall have pre-import condition. 4.14 Details of Duties exempted Imports under Advance Authorisation are exempted from payment of Basic Customs Duty, Additional Customs Duty, Education Cess, Anti-dumping Duty, Countervailing Duty, S....
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...., at the time of filing application for Export Obligation Discharge Certificate to Regional Authority concerned. (iii) Waste / Scrap arising out of manufacturing process, as allowed, can be disposed off on payment of applicable duty even before fulfillment of export obligation. 4.17 Validity Period for Import and its Extension Validity period for import under Advance Authorisation shall be as prescribed in Handbook of Procedures. 4.18 Importability/Export ability of items that are Prohibited/Restricted/STE (i) (ii) No export or import of an item shall be allowed under Advance Authorisation / DFIA if the item is prohibited for exports or imports respectively. Export of a prohibited item may be allowed under Advance Authorisation provided it is separately so notified, subject to the conditions given therein. Items reserved for imports by STEs cannot be imported against Advance Authorisation / DFIA. However, those items can be procured from STEs against ARO or Invalidation letter. STES are also allowed to sell goods on High Sea Sale basis to holders of Advance Authorisation / DFIA holder. STEs are also permitte....
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....lease Order or Invalidation Letter. (vi) Deleted 72 (vii) Validity of Advance Release Order / Invalidation Letter shall be co- terminous with validity of Authorisation. 4.21 Currency for Realisation of Export Proceeds. (i) Export proceeds shall be realized in freely convertible currency except otherwise specified. Provisions regarding realisation and non realisation of export proceeds are given in paragraph 2.52, 2.53 and 2.54 of FTP. (ii) Deleted (iii) Export to SEZ Units shall be taken into account for discharge of export obligation provided payment is realised from Foreign Currency Account of the SEZ unit. (iv) Export to SEZ Developers / Co-developers can also be taken into account for discharge of export obligation even if payment is realised in Indian Rupees. (v) Authorisation holder needs to file Bill of Export for export to SEZ unit /developer/co-developer in accordance with the procedures given in SEZ Rules, 2006. 4.22 Export Obligation Period and its Extension Period for fulfilment of export obligation and its extension under Advance Authorisation shall be as prescribed in Handbook of Procedures. 4.....
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....ich is subjected to pre-import condition or where SION prescribes 'Actual User' condition or Appendix-4) prescribes pre import condition for such an input. 4.28 Minimum Value Addition Minimum value addition of 20% shall be required to be achieved. 4.29 Validity &Transferability of DFIA (i) Applicant shall file online application to Regional Authority concerned before starting export under DFIA. (ii) Export shall be completed within 12 months from the date of online filing of application and generation of file number. (iii) While doing export/supply, applicant shall indicate file number on the export /supply documents viz. Shipping Bill / / Bill of Export / Tax invoice for supply prescribed under GST rules. (iv) In terms of Para 4.12 of FTP, Wherever SION permits use of either (a) a generic input or (b) alternative input, the specific input together with quantity [which has been used in manufacturing the export product] should be indicated/ endorsed in the relevant Shipping Bill / Bill of Export / Tax invoice for supply prescribed under GST rules . Only such inputs may be permitted for import in the authorisation in prop....
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.... 3(9) of customs Tariff Act) input for manufacture of export product. 4.32 Items of Export Following items, if exported, would be eligible: (i) Gold jewellery, including partly processed jewellery and articles including medallions and coins (excluding legal tender coins), 76 (ii) whether plain or studded, containing gold of 8 carats and above up to a maximum limit of 22 carats; Silver jewellery including partly processed jewellery, silverware, silver strips and articles including medallions and coins (excluding legal tender coins and any engineering goods) containing more than 50% silver by weight; (iii) Platinum jewellery including partly processed jewellery and articles including medallions and coins (excluding legal tender coins and any engineering goods) containing more than 50% platinum by weight. 4.33 Schemes The schemes are as follows: (i) Advance Procurement / Replenishment of Precious Metals from Nominated Agencies; (ii) Replenishment Authorisation for Gems; (iii) Replenishment Authorisation for Consumables; (iv) Advance Authorisation for Precious Metals. 4.34 Advance Procurement/ Replenishment of Pre....
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....i) Replenishment Authorisation for duty free (excluding Integrated Tax and Compensation cess leviable under Section 3(7) and 3(9) of Customs Tariff Act) import of Consumables, Tools and other items namely, Tags and labels, Security censor on card, Staple wire, Poly bag (as notified by Customs) for Jewellery made out of precious metals (other than Gold & Platinum) equal to 2% and for Cut and Polished Diamonds and Jewellery made out of Gold and Platinum 78 (ii) equal to 1% of FOB value of exports of the preceding year, may be issued on production of Chartered Accountant Certificate indicating the export performance. However, in case of Rhodium finished Silver jewellery, entitlement will be 3% of FOB value of exports of such jewellery. This Authorisation shall be non-transferable and subject to actual user condition. Application for import of consumables as given above shall be filed online to the concerned Regional Authority in ANF 4H. 4.37 Advance Authorisation for Precious Metals (a) Advance Authorisation shall be granted on pre-import basis with 'Actual User' condition for duty free (excluding Integrated Tax and Compen....
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....o import gold as input only for the purpose of manufacture and export by themselves during the remaining validity period of the Nominated Agency certificate. (iv) Reserve Bank of India can authorize any bank as Nominated Agency. (iv) Procedure for import of precious metal by Nominated Agency (other than those authorized by Reserve Bank of India and the Gems & Jewellery units operating under EOU and SEZ schemes) and the 80 (v) monitoring mechanism thereof shall be as per the provisions laid down in Hand Book of Procedures. A bank authorised by Reserve Bank of India is allowed export of gold scrap for refining and import standard gold bars as per Reserve Bank of India guidelines. 4.42 Import of Diamonds for Certification / Grading & Re-export Following agencies are permitted to import diamonds to their laboratories without any import duty, for the purpose of certification / grading reports, with a condition that the same should be re-exported with the certification/grading reports, as per the procedure laid down in Hand Book of Procedures: (1) (2) (3) Gemological Institute of America (GIA), Mumbai, Maharashtra. I....
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.... Commerce and with approval of Gem & Jewellery Export Promotion Council (GJEPC), may export gold / silver / platinum jewellery and articles thereof for exhibitions abroad. (ii) Personal carriage of gold / silver / platinum jewellery, precious, semi-precious stones, beads and articles and export of branded jewellery is also permitted, subject to conditions as in Handbook of Procedures. 4.47 Personal Carriage of Export/Import Parcels Personal carriage of gems and jewellery export parcels by foreign bound passengers and import parcels by an Indian importer/foreign national may be permitted as per the Handbook of Procedures. 4.48 Export by Post 82 Export of jewellery through Foreign Post Office including via Speed Post is allowed. The jewellery parcel shall not exceed 20 kgs by weight. 4.49 Private / Public Bonded Warehouse Private / Public Bonded Warehouses may be set up in SEZ/DTA for import and re-export of cut and polished diamonds, cut and polished coloured gemstones, uncut & unset precious & semi-precious stones, subject to achievement of minimum value addition of 5% by DTA units. 4.49(A) Import, auction/sale and re-e....
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....be allowed to re-import rejected precious metal jewellery as per paragraph 4.91 of Handbook of Procedures. 4.53 Export and import on consignment basis Gems & Jewellery exporters shall be allowed to export and import diamond, gemstones & jewellery on consignment basis as per Handbook of Procedures and Customs Rules and Regulations. 84 CHAPTER 5 EXPORT PROMOTION CAPITAL GOODS (EPCG) SCHEME 5.00 Objective The objective of the EPCG Scheme is to facilitate import of capital goods for producing quality goods and services and enhance India's manufacturing competitiveness. 5.01 EPCG Scheme (a) (b) (c) EPCG Scheme allows import of capital goods (except those specified in negative list in Appendix 5 F) for pre-production, production and post-production at zero customs duty. Capital goods imported under EPCG Authorisation for physical exports are also exempt from IGST and Compensation Cess upto 31.3.2018 only, leviable thereon under the subsection (7) and subsection (9) respectively, of section 3 of the Customs Tariff Act, 1975 (51 of 1975), as provided in the notification issued by Department of Revenue. Alternatively....
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....ms at port of registration of Authorisation. Export Promotion Capital Goods (EPCG) Scheme also covers a service provider who is designated / certified as a Common Service Provider (CSP) by the DGFT, Department of Commerce or State Industrial Infrastructural Corporation in a Town of Export Excellence subject to provisions of Foreign Trade Policy/Handbook of Procedures with the following conditions:- 86 (i) Export by users of the common service, to be counted towards fulfillment of EO of the CSP shall contain the EPCG Authorisation details of the CSP in the respective Shipping bills and concerned RA must be informed about the details of the Users prior to such export; (ii) Such export will not count towards fulfillment of specific export obligations in respect of other EPCG Authorisations (of the CSP/User); and (iii) Authorisation holder shall be required to submit Bank Guarantee (BG) which shall be equivalent to the duty saved. BG can be given by CSP or by any one of the users or a combination thereof, at the option of the CSP. 5.03 Actual User Condition Imported capital goods shall be subject to Actual User condition....
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....uch domestic manufacturer shall be eligible for deemed export benefits under paragraph 7.03 of FTP and as may be provided under GST Rules under the category of deemed exports. Such domestic sourcing shall also be permitted from EOUs and these supplies shall be counted for purpose of fulfilment of positive NFE by said EOU as provided in Para 6.09 (a) of FTP. 5.08 Calculation of Export Obligation In case of direct imports, EO shall be reckoned with reference to actual duty saved amount. In case of domestic sourcing, EO shall be reckoned with reference to notional Customs duties saved on FOR value. 88 88 5.09 Incentive for early EO fulfilment With a view to accelerating exports, in cases where Authorisation holder has fulfilled 75% or more of specific export obligation and 100% of Average Export Obligation till date, if any, in half or less than half the original export obligation period specified, remaining export obligation shall be condoned and the Authorisation redeemed by RA concerned. However no benefit under Para 5.21 of HBP shall be permitted where incentive for early EO fulfillment has been availed. 5.10 Reduced EO f....
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....re. Trading units are not covered under these schemes. (b) Objectives of these schemes are to promote exports, enhance foreign exchange earnings, attract investment for export production and employment generation. 6.01 Export and Import of Goods (a) (b) An EOU / EHTP / STP / BTP unit may export all kinds of goods and services except items that are prohibited in ITC (HS). However export of gold jewellery, including partly processed jewellery, whether plain or studded, and articles, containing gold of 8 carats and above upto a maximum limit of 22 carats only shall be permitted. Export of Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET) shall be subject to fulfilment of the conditions indicated in ITC (HS). In respect of an EOU, permission to export a prohibited item may be considered, by BOA, on a case to case basis, provided such raw materials are imported and there is no procurement of such raw material from DTA. 91 97 (c) Procurement and supply of export promotion material like brochure / literature, pamphlets, hoardings, catalogues, posters etc up to a maximum value limit of 1.5% of F....
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....6.01 (d)(ii) and 6.01(d)(iii) above, certain specified goods for creating a central facility. Software EOU/ DTA units may use such facility for export of software. An EOU engaged in agriculture, animal husbandry, aquaculture, floriculture, horticulture, pisciculture, viticulture, poultry or sericulture may be permitted to remove specified goods in connection with its activities for use outside the premises of the unit. Gems and jewellery EOUS may source gold / silver / platinum through nominated agencies on loan / outright purchase basis. Units obtaining gold / silver / platinum from nominated agencies, either on loan basis or outright purchase basis shall export gold / silver / platinum within 90 days from date of release. EOU / EHTP/STP / BTP units, other than service units, may export to Russian Federation in Indian Rupees against repayment of State Credit/ Escrow Rupee Account of buyer subject to RBI clearance, if any. Procurement and export of spares / components, upto 5% of FOB value of exports, may be allowed to same consignee / buyer of the export article, subject to the condition that it shall not count for NFE an....
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.... contravention of any provision of the notification under which these goods were imported or procured, read with Customs Act, 1962 or Central Excise Act, 1944, and that the lien on the goods shall remain with the Customs Department, which will have first charge over the said goods for recovery of sum due from the 94 unit to Government under provision of Section 142(b) of the Customs Act, 1962 read with the Customs (Attachment of Property of Defaulters for Recovery of Govt. Dues) Rules, 1995. 6.04 Net Foreign Exchange Earnings EOU / EHTP / STP / BTP unit shall be a positive net foreign exchange earner. In addition sector specific provision of Appendix 6 B of Appendices & ANFS, where a higher value addition and other conditions are given, shall be required to be followed. NFE Earnings shall be calculated cumulatively in blocks of five years, starting from commencement of production. Whenever a unit is unable to achieve NFE due to prohibition / restriction imposed on export of any product mentioned in LoP, the five year block period for calculation of NFE earnings may be suitably extended by BoA. Further, wherever a unit is unab....
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....ment as EOUS. However, this shall not apply to existing units, units in EHTP / STP/ BTP, and EOUS in Handicrafts/Agriculture/ Floriculture/Aquaculture/Animal Husbandry /Information Technology, Services, Brass Hardware and Handmade jewellery sectors. BOA may allow establishment of EOUs with a lower investment criteria. 6.07 Applications & Approvals (a) Deleted (b) Deleted (c) Deleted (d) Deleted 96 96 6.08 DTA Sale of Finished Products / Rejects / Waste/ Scrap / Remnants and By-products Entire production of EOU/EHTP/STP/BTP units shall be exported. However, the following are allowed as exceptions subject to the conditions specified. (a) (i) Units, other than gems and jewellery units may sell finished goods manufactured by them as specified in LoP (including by- products, rejects, waste and scraps arising in the course of production, manufacture, processing or packaging of such goods) which are freely importable under FTP in DTA, subject to fulfillment of positive NFE, on payment of excise duty, if applicable, and/ or payment of GST and compensation cess along with reversal of duties of Custom leviable under F....
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....value of exports and /or 50% of foreign exchange earned, where payment of such services is received in foreign exchange. (c) Gems and jewellery units may sell upto 10% of FOB value of exports of the preceding year in DTA, subject to fulfillment of positive NFE. The unit shall pay applicable GST and compensation cess along with reversal of duties of Customs leviable under First Schedule of the Customs Tariff Act, 1975 availed as exemption, on inputs used in such jewellery. (d) Unless specifically prohibited in LoP, rejects may be sold in DTA on payment of excise duty, if applicable, and/or payment of GST and compensation cess along with reversal of duties of Customs leviable under First Schedule of the Customs Tariff Act, 1975 availed as exemption on inputs on prior intimation to Customs authorities. Sale of rejects upto 5% of FOB value of exports shall not be subject to achievement of NFE. (e) Scrap / waste / remnants arising out of production process or in connection therewith may be sold in DTA, as per SION notified under Duty Exemption Scheme, on payment of applicable duties and/ or taxes and compensation cess. Such ....
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....any other sector that may be notified in HBP), can't supply goods, where basic customs duty and CVD is nil or exempted otherwise, to holders of Advance Authorisation / Advance Authorisation for annual requirement. (b) Supplies effected in DTA against foreign exchange remittance received from overseas. (c) (d) (e) (f) Supplies to other EOU / EHTP / STP / BTP / SEZ units, provided that such goods are permissible for procurement in terms of Para 6.01 of FTP. Supplies made to bonded warehouses set up under FTP and / or under section 65 of Customs Act and free trade and warehousing zones, where payment is received in foreign exchange. Supplies of goods and services to such organizations which are entitled for duty free import of such items in terms of general exemption notification issued by MoF, as may be provided in HBP. (g) Supplies of Information Technology Agreement (ITA-1) items and notified zero duty telecom / electronics items. Supplies of items like tags, labels, printed bags, stickers, belts, buttons or hangers to DTA unit for export. (h) Supply of LPG produced in an EOU refinery to Public Sector domestic ....
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....titlements of EOU/EHTP/STP/BTP units are as under: (a) Exemption from industrial licensing for manufacture of items reserved for SSI sector. (b) Export proceeds will be realized within nine months. (c) (d) Units will be allowed to retain 100% of its export earnings in the EEFC account. Unit will not be required to furnish bank guarantee at the time of import or going for job work in DTA, where: (i) The unit has turnover of Rs. 5 crore or above; (ii) The unit is in existence for at least three years; and (iii) The unit: (1) has achieved positive NFE / export obligation wherever applicable; (2) has not been issued a show cause notice or a confirmed demand, during the preceding 3 years, on grounds other than procedural violations, under the penal provision of the Customs Act, the Central Excise Act, the Foreign Trade (Development & Regulation) Act, the Foreign Exchange Management Act, the Finance Act, 1994 covering Service Tax or any allied Acts or the rules made thereunder, on account of fraud / collusion / wilful 102 mis-statement / suppression of facts or contravention of any of the provisions th....
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....) Goods supplied by one unit of EOU/EHTP/STP/ BTP to another unit shall be on payment of applicable GST and compensation cess as per following procedure for movement of goods: (i) The supplier EOU shall endorse on usual commercial documents, such as, tax invoice and delivery challan, the amount of duties of Customs leviable under First Schedule to the Customs Tariff Act, 1975 availed as exemption on such goods supplied to another EOU. The recipient EOU shall pay such endorsed Customs duty and applicable GST and compensation cess before clearance of such goods or finished goods manufactured or produced from such goods in DTA. (ii) Upon receipt of goods, the recipient EOU shall submit endorsed copies of tax invoice to their jurisdictional Customs authority as well as to the jurisdictional Customs authorities of the supplier EOU. (d) In respect of a group of EOUS / EHTPS / STPs / BTP Units which source inputs centrally in order to obtain bulk discount and / or reduce cost of transportation and other logistics cost and / or to maintain effective supply chain, inter unit transfer of goods and services may be permitted on a case....
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....d through job work may either be cleared from job worker's premises on payment of applicable duty and/or taxes, as provided under Para 6.08 above on transaction value or destroyed in presence of Customs authority or returned to unit. Destruction shall not apply to gold, silver, platinum, diamond, precious and semi-precious stones. 105 (d) Sub contracting/ exchange by gem sand jewellery EOUS through other EOUS or SEZ units or units in DTA, shall be as per procedure indicated in HBP. 6.15 Sale of Unutilized Material (a) In case an EOU / EHTP/ STP/BTP unit is unable to utilize goods and services, imported or procured from DTA, it maybe: (i) Transferred to another EOU / EHTP / STP / BTP / SEZ unit; or (ii) Disposed of in DTA with intimation to Customs authorities on payment of applicable duties and/ or taxes and compensation cess. In addition, exemption of duties of Customs leviable under First Schedule of the Customs Tariff Act, 1975 availed, if any on the goods, at the time of import will also be payable and submission of import Authorisation; or (iii) Exported. Such transfer from EOU/EHTP/ STP/ BTP unit to another ....
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.... Goods (a) General provisions of FTP relating to export /import of replacement/repair of goods would also apply equally to EOU/EHTP/STP/BTP units. Cases not covered by these provisions shall be considered on merits by DC. (b) (c) Goods sold in DTA and not accepted for any reasons, maybe brought back for repair/replacement, under intimation to concerned jurisdictional customs authorities. Goods or parts thereof, on being imported / indigenously procured and found defective or otherwise unfit for use or which have been damaged or become defective subsequently, may be returned and replacement obtained or destroyed. In the event of replacement, goods may be brought back from foreign suppliers or their authorized agents in India or indigenous suppliers. The unit can take free of cost replacement (duty paid) from the authorized agents in India of foreign suppliers, provided the defective part is re-exported 107 or destroyed. However, destruction shall not apply to precious and semi-precious stones and precious metals. 6.18 Exit from EOU Scheme (a) (b) (c) With approval of DC, an EOU may opt out of scheme. Such exi....
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....ble import duty, or from domestic market after payment of excise duty/GST, and unit is subsequently converted to EOU, in such cases removal of such capital goods to DTA after exit would be without payment of duty. Similarly, in cases where a DTA unit imported capital goods under EPCG Scheme and after completely fulfilling export obligation gets converted into EOU, unit would not be charged customs duty on capital goods at the time of removal of such capital goods in DTA when exit. An EOU / EHTP / STP / BTP unit may also be permitted by DC to exit under Advance Authorisation as one time option. This will be subject to fulfillment of positive NFE criteria. A simplified procedure may be provided to fast track the De- bonding/ Exit of the STP / EHTP Unit which has not availed any duty benefit on procurement of raw material, capital goods etc. 6.19 Conversion (a) (b) (c) Existing DTA units may also apply for conversion into an EOU / EHTP/STP/BTP unit. Existing EHTP / STP units may also apply for conversion / merger to EOU unit and vice-versa. In such cases, units will avail exemptions in duties and taxes as applicable.....
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.... in certain specified cases, as may be decided by the Government from time to time. 7.01 Deemed Exports (i) "Deemed Exports" for the purpose of this FTP refer to those transactions in which goods supplied do not leave country, and payment for such supplies is received either in Indian rupees or in free foreign exchange. Supply of goods as specified in Paragraph 7.02 below shall be regarded as "Deemed Exports" provided goods are manufactured in India. (ii) "Deemed Exports" for the purpose of GST would include only the supplies notified under Section 147 of the CGST/SGST Act, on the recommendations of the GST Council. The benefits of GST and conditions applicable for such benefits would be as specified by the GST Council and as per relevant rules and notification. 7.02 Categories of Supply Supply of goods under following categories (a) to (d) by a manufacturer and under categories (e) to (h) by main / sub-contractors shall be regarded as "Deemed Exports": Supply of goods against Advance Authorisation / Advance Authorisation for annual requirement / DFIA; A. Supply by manufacturer: (a) (b) (c) (d) Deleted....
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....idding. Supply of goods to United Nations or International organization for their official use or supplied to the projects financed by the said 114 United Nations or an International organization approved by Government of India in pursuance of section 3 of United Nations (Privileges and Immunities Act), 1947. List of such organization and conditions applicable to such supplies is given in the Customs notification no. 84/97-Customs dated 11.11.1997, as amended from time to time. A list of Agencies, covered under this paragraph, is given in Appendix-7B. (h) Supply of goods to nuclear power projects provided: (i) Such goods are required for setting up of any Nuclear Power Project as specified in the list 32 at Sl. No. 602, Customs notification no. 50/2017-Customs dated 30.6.2017, as amended from time to time and subject to conditions mentioned therein. (ii) The project should have a capacity of 440 MW or more. (iii) A certificate to the effect is required to be issued by an officer not below the rank of Joint Secretary to Government of India, in Department of Atomic Energy. (iv) Tender is invited through National com....
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....uthorisation holder. Sub-contractors may, however, make supplies to main contractor instead of supplying directly to designated Projects/ Agencies. Payments in such cases shall be made to sub-contractor by main-contractor and not by project Authority. (iii) Supply of domestically manufactured goods by an Indian Sub- contractor to any Indian or foreign main contractor, directly at the designated project's/ Agency's site, shall also be eligible for deemed export benefit provided name of sub-contractor is indicated either originally or subsequently (but before the date of supply of such goods) in the main contract. In such cases payment shall be made directly to sub-contractor by the Project Authority. 7.08 Benefits on specified supplies (i) Deemed export benefits shall be available for supplies of 'Cement" under Para 7.02 (e) only. Deemed export benefit shall be available on supply of "Steel": (ii) (a) As an inputs to Advance Authorisation/ Annual Advance Authorisation/DFIA holder/ an EOU. 117 (b) To multilateral/ bilateral funded Agencies as per sub-Paral 7.02(e). (iii) Deemed export benefit shall be available o....
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....CHAPTER 8 QUALITY COMPLAINTS AND TRADE DISPUTES 8.00 Objective Exporters need to project a good image of the country abroad to promote exports. Maintaining an enduring relationship with foreign buyers is of utmost importance, and complaints or trade disputes, whenever they arise, need to be settled amicably as soon as possible. Importers too may have grievances as well. In an endeavour to resolve such complaints or trade disputes and to create confidence in the business environment of the country, a mechanism is being laid down to address such complaints and disputes in an amicable way. 8.01 Quality Complaints/ Trade disputes The following type of complaints may be considered: (a) (b) (c) Complaints received from foreign buyers in respect of poor quality of the products supplied by exporters from India; Complaints of importers against foreign suppliers in respect of quality of the products supplied; and Complaints of unethical commercial dealings categorized mainly as non-supply/ partial supply of goods after confirmation of order; supplying goods other than the ones as agreed upon; non-payment; non-adherence t....
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....inancial or fiscal benefit granted under the Act. Section 11(2) of the Act provides for imposition of fiscal penalty in cases where a person makes or abets or attempts to make any import or export in contravention of any provision of the Act, any Rules or Orders made there under or the Foreign Trade Policy. 122 8.04 Mechanism for handling of Complaints/Disputes (a) Committee on Quality complaints and Trade Disputes (CQCTD) To deal effectively with the increasing number of complaints and disputes, a 'Committee on Quality Complaints and Trade Disputes' (CQCTD) will be constituted in the 22 offices of the RA's of DGFT. Names of RAs, where CQCTD has been constituted and jurisdiction of CQCTD is given in Chapter 8 of the Handbook of Procedures. (b) Composition of the CQCTD (c) The CQCTD would be constituted under the Chairpersonship of the Head of Office. The constitution of CQCTD is given in Chapter 8 of the Hand Book of Procedures. Functions of CQCTD The Committee (CQCTD) will be responsible for enquiring and investigating into all Quality related complaints and other trade related complaints falling under the jurisdict....
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....ng unit which has a definitive postal address. (b) "Actual User (Non-Industrial)" is a person (either natural & legal) who utilizes the imported goods for his own use in. (i) any commercial establishment, carrying on any business, trade or profession, which has a definitive postal address; or (ii)any laboratory, Scientific Development (R&D) institution, and or Research university or other 125 9.04 educational institution or hospital which has a definitive postal address; or (iii) Any service industry which has a definitive postal address. "AEZ" means Agricultural Export Zones notified by DGFT in Appendix 2V of Appendices and Aayat Niryat Forms. 9.05 "Appeal" is an application filed under section 15 of the Act and includes such applications preferred by DGFT officials in government interest against decision by designated adjudicating/appellate authorities. 9.06 "Applicant" means person on whose behalf an application is made and shall, wherever context so requires, includes person signing the application. 9.07 "Authorisation†means permission as included in Section 2(g) of the ....
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....s or manages a part or whole of infrastructure and other facilities in SEZ as approved by Central Government and also includes a co-developer. 127 9.15 "Development Commissioner" means Development Commissioner of SEZ 9.16 9.17 9.17A "Domestic Tariff Area (DTA)" means area within India which is outside SEZs and EOU/EHTP/STP/BTP. Deleted "e commerce†for the purpose of Merchandise Exports from India Scheme (MEIS) under Foreign Trade Policy (2015-20) (FTP) shall mean the export of goods hosted on a website accessible through the internet to a purchaser. While the dispatch of goods shall be made through courier or postal mode, as specified under the MEIS, the payment for goods purchased on e- commerce platform shall be done through international credit /debit cards and as per the Reserve Bank of India Circular (RBI/2015-16/185) [A.P.( DIR Series) Circular No. 16 dated September 24, 2015.] as amended from time to time. 9.18 "EOU" means Export Oriented Unit for which a letter of permit has been issued by Development Commissioner. 9.19 "Excisable goods" means any goods produced or manufactured ....
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...., for the purpose of FTP, shall also include agriculture, aquaculture, animal husbandry, floriculture, horticulture, pisciculture, poultry, sericulture, viticulture and mining. 9.32 "Manufacturer Exporter" means a person who exports goods manufactured by him or intends to export such goods. 9.33 "Merchant Exporter†means a person engaged in trading activity and exporting or in tending to export goods. 9.34 "NC" means the Norms Committee in the Directorate General of Foreign Trade for approval of adhoc input –output norms in cases where SION does not exist and recommend SION to be notified in DGFT. 9.35 "Notification" means a notification published in Official Gazette. 130 9.36 "Order" means an Order made by Central Government under the Act. 9.37 "Part" means an element of a sub-assembly or assembly not normally useful by itself, and not amenable to further disassembly for maintenance purposes. Apart may be a component, spare or an accessory. 9.38 "Person" means both natural and legal and includes an individual, firm, society, company, corporation or any other legal person including the DGF....
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....greement on Trade in Services (GATS) and earning free foreign exchange. 9.51 9.52 9.53 "Service Provider" means a person providing: (i) Supply of a ‘service' from India to any other country; (Mode1- Cross border trade) (ii) Supply of a 'service' from India to service consumer(s) of any other country in India; (Mode 2-Consumption abroad) (iii) Supply of a 'service' from India through commercial presence in any other country. (Mode 3 Commercial Presence.) (iv)Supply of a ‘service' from India through the presence of natural persons in any other country (Mode 4- Presence of natural persons.) "Ships" mean all types of vessels used for seaborne trade or coastal trade, and shall include second hand vessels. "SION" means Standard Input Output Norms notified by DGFT. 133 9.54 "Spares" means a part or a sub-assembly or assembly for substitution that is ready to replace an identical or similar part or sub-assembly or assembly. Spares include a component or an accessory. 9.55 "Specified" means specified by or under the provisions of this Policy through Notification/Public Notice. 9.56 |"Status_ho....
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....out in the UNSC United Nations Security Council and International Atomic Energy Agency (IAEA) documents, namely, 1. S/2006/853*; 2. S/2006/853/Corr.1; 3. Part B of S/2009/364; 4. Annex III of Resolution 2094 (2013); 5. S/2016/1069; 6. Annex A to INFCIRC/254/Rev.12/Part1 (IAEA document); 7. Annex to INFCIRC/254/Rev.9/Part2 (IAEA document); 8. S/2014/253; 9. S/2016/308; 10. Annex III of Resolution 2321 (2016); and 11. other items, materials, equipment, goods and technology, as determined by the Central Government, which could contribute to DPRK's nuclear related, ballistic missile-related or other weapons of mass destruction related programmes; 136 (iv) Luxury goods, including, but not limited to, the items specified in Annex IV of Resolution 2094 (2013), Annex IV of Resolution 2270 (2016) and Annex IV of Resolution 2321 (2016); (v) Items as determined by the Central Government, except food or medicine that could directly contribute to the development of the Democratic People's Republic of Korea's operational capabilities of its armed forces. This measure is subject to the exemptions set out in paragraph 8 (a)....
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....of Resolution 1718 (2006); and Resolution, as the case may be, means the UNSC Resolutions under Chapter VII of the Charter of the United Nations on Democratic People's Republic of Korea, namely, 1718 (2006), 1874 (2009), 2087 (2013), 2094 (2013), 2094 (2013), 2270 (2016), 2231 (2016), 2356 (2017), 2371 (2017) and 2375 (2017). 138 139 Acronym GLOSSARY (ACRONYMS) Explanation ACU AEZ ANF ARE-1 ARE-3 ACP AEO AA AANF Advance Authorisation Appendices and Aayaat Niryat Form Asian Clearing Union Agri Export Zone Aayat Niryaat Form Application for Removal of Excisable Goods for Export (By Air/Sea/Post/Land) Application for Removal of Excisable Goods from a factory or a warehouse to another warehouse Accredited Clients Programme Authorised Economic Operator AES Approved Exporter's Scheme APEDA Agricultural & Processed Food Products Export Development Authority ARO Advance Release Order ASEAN ASIDE AU BCD BG BIFR BOA BOT BRC BTP BIS CBEC CCP CEA CEC CED Association of South-East Asian Nations Assistance to States for Infrast....
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....ctronic Fund Transfer Export General Manifest Electronic Hardware Technology Park 141 EIC ЕО EODC ЕОРEOU EPC EPCG EPO EXIM FDI FE FEMA FIEO FIRC FOB FOR FT(D&R)Act FTDO FTP FT(R) FTWZ FTA G&J EPC GOI GATS GR HACCP HBP HHEC ICB ICD ICM IEC ISO IAEA INFCIRC IEM IMSC IL ISO ITC (HS) Export Inspection Council Export Obligation Export Obligation Discharge Certificate Export Obligation Period Export Oriented Unit Export Promotion Council Export Promotion Capital Goods Engineering Process Outsourcing Export Import Foreign Direct Investment Foreign Exchange Foreign Exchange Management Act Federation of Indian Export Organisation Foreign Exchange Inward Remittance Certificate Free On Board Freight on Road and Rails Foreign Trade ( Development & Regulation) Act, 1992 (22 of 1992) Foreign Trade Development Officer Foreign Trade Policy Rules Foreign Trade (Regulation) Rules Free Trade and Warehousing Zone Free Trade Agreement Gems & Jewellery Export Promotion Council Gover....